For many business enterprises, the process of providing accurate price quotes is complex because the price quotes are dependent upon many variables. Some of these variables include the quantity of a product requested, the type of product requested, the class of the customer who is requesting the product, inventory levels for the requested product, as well as applicable discounts that apply to the requested product. Resolving each of these variables in order to provide an accurate quote in real time is a complex task. Often, the ability to provide such an accurate quote provides a competitive business advantage.
One of the more difficult tasks in providing a real time price quote for a product is the determination of which price rules apply to the product. Another difficult task in providing a real time price quote is determining how the various price rules that apply to a given product interact with each other. For example, consider the case in which there are two price rules that apply to a given product, the first price rule specifying 10 percent off the list price and the second price rule specifying five dollars off the list price. Which of these rules should be applied, and in which order? Should the first price rule be applied to the list price, and then the second price rule be applied to the result of applying the first rule (i.e. take 10 percent off the price and then apply a five dollar discount)? Or should the second price rule and then the first price rule be applied to the list price (i.e. take five dollars off the price and then apply a 10 percent discount)? Or, alternatively, should the first price rule be ignored when the second price rule applies the product? This example illustrates the complexity that arises when just a few price rules apply to a given product. This complexity increases when multiple products, vendors and additional variables are taken into consideration.
Often, price rules are negotiated on a customer-by-customer basis, for fixed periods of time, and/or for fixed sets of products. For example, pharmaceutical company “A” may negotiate a 10 percent discount for all products sold by chemical company “B.” Furthermore, pharmaceutical company “A” may negotiate an additional 5 percent discount for a specific product, such as bulk sodium chloride, that is to be purchased from chemical company “B.” Each of the negotiated discounts may cover designated time periods. Furthermore, individual divisions within pharmaceutical company “A” may negotiate discounts or other forms of pricing arrangements with chemical company “B.” Thus, for a single vendor/customer relationship, there may be multiple pricing agreements covering overlapping time periods, products, and divisions within the customer business organization. A salesperson working for chemical company “B” must attempt to resolve each of these pricing agreements in order to determine a price quote for an order placed by pharmaceutical company “A.” Added to this problem is the fact that chemical company “B” has many other customers, each with a set of negotiated pricing agreements.
Price rules that determine the price of products may arise from sources independent of the price rules generated by the negotiation of price agreements between vendors and customers. Salespeople may be given the flexibility to apply discounts. In fact, this privilege may be tiered based on the experience level of the salesperson. The vendor may apply special discounts to stock items that are about to become obsolete or are overstocked. The vendor may attach specific price rules to individual products offered by the vendor. For instance, the vendor may tier the list price of an individual product based on the amount of product ordered. If chemical company “B” sells the chemical trifluoroethanol, for example, it may set a first price if the customer buys one gram of the chemical, a second lower price if the customer buys ten grams of the chemical, and a bulk price if the customer buys 100 grams or more of the chemical. Furthermore, a vendor may tier the price of a product based on the geographical region in which the product is sold in order to increase market share in a specific region or satisfy some other marketing goal.
In yet another layer of complexity, there are many situations in which a salesperson may represent multiple vendors. Each vendor may offer a range of price agreements. Some of these price agreements may be customer-specific, region-specific, or applicable for specific time periods. In such situations, the salesperson must perform a series of analyses in order to obtain the most favorable price quote for the specific customer.
Each product in any given price quote may have a large number of applicable price rules that are each designed to set and/or adjust the price of the product. Often, for a given product, the way the applicable price rules are combined in order to determine a price quote for the product is important.
Prior art electronic pricing systems do not provide satisfactory methods for tracking and resolving the complex array of price rules that are associated with products and services sold by business enterprises. Given the above background, what is need in the art is a systematic method for (i) tracking each of the price agreements negotiated between vendors and customers, (ii) tracking the price rules that applicable to each product in a product catalogue, and (iii) resolving multiple applicable price rules that may apply to each product specified in a product quote.